ZURICH, May 3, 2006 (PRIMEZONE) -- Nobel Biocare continues to outpace the market with record quarterly revenue growth and gross margin:
- Strong growth across all regions drove revenue up 27% in local
currencies, or 32% in reporting currency, to EUR 142.7 million
(Q1/2005: 108.0 million). North America was up 31%, Europe 24% and
Asia/Pacific 33% in local currencies.
- Gross margin marks a new high of 83.7% (81.9%(a)).
- Profit from operations rose 40% to EUR 48.5 million (34.7
million(a)), an EBIT margin of 34%.
- Profit for the period climbed to EUR 37.2 million (26.0 million,
excluding the one-time impact from the divestiture of Entific
Medical Systems AB in Q1/ 2005).
- Basic earnings per share of EUR 1.48.
Successful strategic initiatives and a new share buyback program:
- 170 new positions created worldwide.
- The Nobel Biocare World Tour 2006 of training and educational
conferences is successfully under way. The three-day education
concept will be set up in 17 major cities around the world.
- New subsidiaries were established in Russia and the Baltic
region.
- Expansion of strategic partnerships with dental schools through
agreements with the University of British Columbia, Canada, and
the University of Maryland, USA.
- The consumer awareness campaign, NobelSmile, has been extended to
29 countries.
- The Board of Directors proposes a new share buyback program to
the Annual General Meeting to gain approval to buy back up to
1,500,000 shares, corresponding to approx. 5.8% of the current
issued capital.
Table 1.
Selected Income Statement figures
Jan-Mar Jan-Mar Change
---------------------------------------------------------------------
In EUR million 2006 2005(a)
Revenue 142.7 108.0 32.1%
Growth in local currencies 26.8% 24.6%
Gross profit 119.5 88.5 35.0%
Gross margin 83.7% 81.9%
Profit from operations 48.5 34.7 39.8%
Operating (EBIT) margin 34.0% 32.1%
Profit for the period w/o sale of
associate 37.2 26.0 43.1%
Profit margin w/o sale of associate 26.1% 24.1%
Basic earnings per share w/o sale of
associate, EUR 1.48 1.01
Basic earnings per share, EUR 1.48 2.20
(a) Certain comparatives were reclassified to conform with current
period's presentation.
All regions continue to outgrow the market and reinforce leadership position
Nobel Biocare has kept up the high expansion pace and lifted revenues organically by 27% to EUR 142.7 million. This was on top of a very strong (+25%) comparative period last year. Thanks to favorable currency conversion effects, growth in reporting currency Euro was 32%. For the eighth consecutive quarter, Nobel Biocare has grown by 20% or more in local currencies.
Growth was driven by the fast acceptance of recently launched solutions that address the demand for long lasting, high-end esthetics and patient comfort combined with shorter, simpler and safer treatment procedures.
All regions recorded expansion stronger than the estimated market growth and strengthened the Company's leadership position globally as well as regionally. North America and Asia/Pacific continued their high expansion pace with 31% and 33% growth in local currencies. Revenue in Europe was up 24% in local currencies. Germany recovered strongly with revenue growth of 40% in Q1 2006. In Switzerland, the high growth momentum was further boosted to 40%. In addition, Belgium, the Netherlands, Norway and Spain recorded the fastest growth in Europe.
Table 2. Revenue by region Jan-Mar Jan-Mar Change in % in EUR M 2006 2005(a) EUR local curr --------------------------------------------------------------------- Europe 66.8 53.9 23.9% 24.0% Proportion of total revenue 47% 50% North America 52.9 36.8 43.8% 30.6% Proportion of total revenue 37% 34% Asia/Pacific 16.6 12.2 36.1% 33.4% Proportion of total revenue 12% 11% Rest of the World 6.4 5.1 25.5% 12.4% Proportion of total revenue 4% 5% --------------------------------------------------------------------- Total 142.7 108.0 32.1% 26.8%
Nobel Biocare World Tour 2006 is successfully under way
Building on the success of the Nobel Biocare World Conference in Las Vegas in 2005, Nobel Biocare takes this year that recipe, which includes very appreciated live surgeries, to 17 cities around the world. The success of the first five meetings was proven by the attendance and the assessment of the participants.
Expansion of consumer awareness NobelSmile campaign to 29 countries
Nobel Biocare further strengthened its consumer awareness program around the world by launching its campaign to inform the general public about Beautiful Teeth Now. The campaign includes patient information material, features in healthcare and lifestyle media, a truck tour and a consumer website: NobelSmile.com that is available in 29 countries.
New education and research partnerships with universities
Training and education of dental professionals continues to be a key strategy. To meet growing patient demands, the change of current pre-doctoral education programs and the integration of dental implant therapy and esthetic dentistry into the pre-doctoral curriculum is an important factor. Nobel Biocare has a leading role in educating and training dental students and dental practitioners on state-of-the-art techniques. Another important purpose of these cooperations is to advance in basic and clinical research. In 2005, a number of agreements were reached with large universities in North America. In the first quarter of 2006, two new university initiatives were announced.
At the University of British Columbia Faculty of Dentistry, Vancouver, Canada, a new hi-tech clinic -- The Nobel Biocare Oral Health Centre - has been established.
With the University of Maryland Dental School, USA, Nobel Biocare has signed a partnership to position the Dental School as a leading center for students and alumni to learn advanced techniques.
Rapid expansion backed by 170 new positions in the first quarter Along with its fast expansion pace, Nobel Biocare continued to invest in talent recruitment, creating a total of 170 new positions worldwide in the first quarter, the majority of which are in sales and sales-related functions. At the end of March 2006, Nobel Biocare employed 1,818 employees.
Gross margin climbs to a new record mark
Continued strong volume growth and a favorable mix change have further powered gross profit and margin. Gross profit climbed to EUR 119.5 million, up from the prior year's EUR 88.5 million*. The respective gross margin marked a new high of 83.7% (81.9%*).
Social charges related to the staff option program amounted to EUR 0.6 million compared to EUR 2.7 million in the first quarter a year earlier.
Despite the higher expenses related to the above-mentioned investment in human talents, the Nobel Biocare World Tour 2006 as well as the expansion into emerging markets (Russia and the Baltic states), the EBIT margin was raised from 32.1% to 34.0% in line with the Company's target for the full year. Operating expenses in relation to revenue remained at 49.8%.
Profit for the period climbed to EUR 37.2 million compared to EUR 26.0 million, excluding the one-time effect from the divestiture of Entific Medical Systems AB in Q1/2005.
Cash flow from operating activities was heavily impacted by tax payments of EUR 30.8 million. The main propellant here was the release of all untaxed reserves in Sweden in response to a change in the respective tax law. As a result of this, cash flow from operations was only EUR 10.7 million (EUR 21.6 million). Additionally, EUR 75.8 million were used to finalize the share-buy-back program 2005.
Acquisition of tangible and intangible assets of EUR 3.5 million was slightly lower than in the prior year (EUR 4.9 million).
Inventories decreased to EUR 27.7 million from EUR 30.1 million at year-end 2005, whereas trade receivable grew -- in line with the sales development -- to EUR 117.5 million.
The significant share buyback (360,350 shares) in the first quarter 2006 was the main reason for the reduction in cash and cash equivalents to EUR 93.7 million from EUR 128.4 million at year-end.
(a) Certain comparatives were reclassified to conform with current period's presentation.
Share buyback program and Annual General Meeting
On 20 March 2006, Nobel Biocare successfully completed ahead of schedule its share buyback program that was initiated in April of 2005 to fund the Company's employee and officer share option program. Within this program, the Company bought back a total of 1,100,000 bearer shares, representing approximately 4% of the issued capital, in the open market.
The Board of Directors has approved a new share buyback program of up to 1,500,000 shares, corresponding to approximately 5.8% of the current issued capital over a period of two years. The repurchase will take place over a second trading line and will lead to a capital reduction by cancellation of these shares.
The share buyback program is subject to approval of the 4th Annual General Meeting of Nobel Biocare, which will be held today in Zurich, Switzerland, at 10.30 am. An Information meeting for Swedish shareholders will be held in Gothenburg on 12 May 2006 at 11.00 am.
Further strengthened scientific data on NobelDirect and NobelPerfect
To counter criticism with regard to the performance of the NobelDirect and NobelPerfect implants, Nobel Biocare has published four scientific studies on NobelDirect and NobelPerfect in addition to its 1-year follow-up of the prospective multi-center study. All publications demonstrate that the marginal bone average stabilizes at the level of the first implant thread and consequently shows no unusual bone loss. One of these retrospective studies consists of 1,009 consecutively placed one-piece implants that confirm stable bone levels from 6 months up to 6 years, showing an overall survival rate of 98.2%.
Outlook
The Company is confident that it will achieve its target of growing revenue in 2006 by approximately 24% in local currencies in a market that independent research predicts to grow by about 18% and raising the EBIT margin to about 34%.
A telephone conference will be held today 3 May 2006 at 15.00 CET.
The dial-in numbers for the telephone conference are:
+41 91 610 5600 (in Europe)
+44 20 7107 0611 (in the UK)
+46 8 5069 2105 (in Sweden)
+1 866 291 4166 (toll free number in the USA)
For more details and additional dial-in numbers, see our homepage: www.nobelbiocare.com
Financial Reporting Calendar:
Annual General Meeting 2006 3 May, 2006
Interim Report 2, 2006 10 August, 2006
Interim Report 3, 2006 19 October, 2006
All reports are available in English, German and Swedish
Disclaimer:
This report may contain forward-looking statements including, but not limited to, projections of future performance of materials and products, financial conditions, results of operations and cash flows, containing risks and uncertainties. These statements are subject to change based on unknown risks and other factors that could cause the actual results or performance to differ materially from the statements made herein.
Nobel Biocare is a medical devices group and the world leader in innovative esthetic dental solutions with its brands Branemark System(R), NobelSpeedy, NobelReplace, NobelPerfect(R), NobelDirect(R), Replace(R) Select, (dental implants) and Procera(R) (individualized dental prosthetics). Nobel Biocare is a one-stop shop for restorative esthetic dentistry, offering a wide range of innovative Crown & Bridge & Implant products, as well as training and education and clinically documented treatment concepts. Nobel Biocare has over 1,800 employees and recorded revenue of EUR 485 million in 2005. The Company is domiciled in Zurich, Switzerland with headquarters in Zurich and in Gothenburg, Sweden. Production takes place at four production sites located in Sweden and the USA. Nobel Biocare has direct sales organizations in 33 countries. The shares of the parent company Nobel Biocare Holding AG are listed on the SWX Swiss Exchange and on the Stockholm Stock Exchange, Sweden.